Cavico Corp. (NASDAQ: CAVO), a leading infrastructure development company based in Vietnam, today announced that it signed an additional construction contract at the Hua Na Hydropower plant with Lilama, a state-owned company owned and operated by the Vietnamese Ministry of Construction. The revenue for this additional contract is expected to be $11.9 million. Cavico signed the initial contract for $4.9 million with Lilama for construction work at this project in April 2009.
According to the term of this new agreement, Cavico’s majority-owned subsidiary, Cavico Power & Resource, will be responsible for the construction of the sub headrace tunnel No. 2, a water diversion tunnel and a surge sharp tank. The Hua Na Hydropower plant, a twin turbine plant which requires a capital investment of approximately $250 million is located on a 20.6 square kilometer property in the Dong Van village of the Nghe An province near the Chu River. Once completed, the hydropower plant is expected to generate approximately 180 megawatts of power and will supply 706 million kilowatt hours annually. The plant will help meet a material electricity demand in Vietnam and significantly alleviate shortages currently experienced in the Central provinces, which includes the Nghe An, Ha Tinh and surrounding provinces. Cavico expects to complete this project in five years.
“The sub headrace tunnel, diversion tunnel and surge sharp tank are all critical components of a hydropower plant,” commented Mr. Hai Thanh Tran, vice president of Cavico. “Once again, we are pleased that this client has entrusted us with the most critical parts of the overall project. This additional work builds on the successful completion of Cavico’s initial scope of work, the construction a diversion tunnel and coffer dam, which validates Cavico’s strength and capabilities in the field of underground construction. We look forward to continuing our close working relationship with the project owner and other contractors at the plant to complete this project on time and in a quality manner.”